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Asia: Stocks rise on back of Wall Street; gold slips

Tue, Dec 06, 2016 - 9:24 AM

PHOTO: EPA

[HONG KONG] Asian stocks opened higher on the back of a strong Wall Street with markets discounting the potential impact of Italy's referendum vote, while US Treasury yields firmed as robust economic data pointed to an interest rate hike next week.

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The data pushed short-dated Treasury yields higher with two-year benchmark yields stabilising near the 1.13 per cent level, not far from a six-year high of 1.17 per cent tested in late November as markets have baked in the probability of a rate increase by the US Federal Reserve next week.

Interest rates futures implied traders saw a 93 per cent chance the Fed would raise rates by a quarter point to 0.50-0.75 per cent next week, CME Group's FedWatch showed.

Oil fell with US crude down more than 1 per cent at US$51.26 per barrel as investors judged a 16 per cent rally since the Organization of the Petroleum Exporting Countries' agreement last Wednesday to curb production was getting stale.

Still, higher stocks and firmer short-dated Treasury yields projected a more optimistic backdrop for risk appetite than Monday when Asian markets plunged as investors worried the euro-zone may be heading for a fresh crisis after the Italian vote.

That lift in sentiment pushed the prices of relative safe-haven assets such as gold and Japanese yen lower.

Spot gold fell by as much as 1.6 per cent to its lowest since early February at US$1,157 an ounce, before bouncing somewhat.